If a firm is subject to capital rationing, it has only a fixed number of dollars available for capital expenditures and numerous projects compete for these dollars.

Question

Quizplus · Accepted Answer

Capital rationing refers to the situation where a firm has limited capital budgets, and it needs to allocate this limited amount of funds among several competing capital investment opportunities. Therefore, option A is correct.

If a Firm Is Subject to Capital Rationing, It Has